The hiddens ones (often bad) for credit cards
- If you don't pay off your balance, your interest charge is more than you would expect.
Suppose you spent $10,000.01 in January, and you paid $10,000 (i.e. with 1 cent unpaid, by mistake, or maybe you just like so), and your annual rate is 24%, guess how much interest you need to pay? Not 0.01*24%/12, but $10000.01*24%/12 ~ 200 bucks for 1 cent not paid!!!
- Be careful of introductory low APR (0% APR).
If you credit changes - maybe you were late to pay another credit card - your APR could jump to 20% or even 30% instantly! You think you are paying this credit on time every time and you are safe. You are dead wrong!
- Late fees, over the limit fees, annual fees, god-knows other fees.
- Some credit cards, although very rare now, have no grace period - i.e. you will be charged an interest the minute you use it.
- Identify theft, internet fraud - be careful of this, and ideally your credit card company provide some favorable terms for you.
- Never leave the balance not fully paid - unless it is truly 0% interest rate and you can be sure the rate won't jump unexpectedly (see above). People like this are called 'dead-beat' by credit card companies - and that's why you want to do that. CC companies made most money from those people who pay minimum balance every time.